Should Ecommerce Retailers Open Brick-and-Mortar Stores?

It used to be that if you had a brick-and-mortar retail store, you eventually added ecommerce capabilities. But now that so many retail businesses are starting out as online-only, a new trend is taking place. The New York Times recently reported that a growing number of online-only retailers are opening brick-and-mortar stores to capture more business and enhance their brands. Should you consider this move?

Obviously, this approach isn’t right for every company. Here are some questions to ask if you’re considering whether a brick-and-mortar store is right for you:

Is your product tactile or unique? Clothing and apparel stores are naturals for this type of brand extension, as shoppers want to touch, feel and try on the merchandise.

Can you find a small space? Most ecommerce sites that open brick-and-mortar stores aren’t going big, but are considering the retail space as a brand extension or showroom. Others are creating pop-up stores that open temporarily for special occasions such as the holiday shopping season.

Can you make it special? A real-world store needs to offer an “experience” to resonate with shoppers, so think about what you can offer in your physical store that you can’t do online.

Do you have an avid customer base? If most of your shoppers come from one part of the country, such as New York City, it might make sense to open a shop there.

Are my sales strong enough to support a retail store? A track record of online sales success will give you an edge in getting a lease and financing for opening a store.

While most of the companies mentioned in the Times article are big chains with deep pockets (such as Gap’s Piperlime division and eBay), there are others that started with entrepreneurial roots, such as eyeglasses retailer Warby Parker and apparel company Bonobos. The Times notes that companies that starting out as an online-only retailer gives you a different perspective on brick-and-mortar sales. For instance, at the Bonobos stores, customers make appointments to come in so the shop can operate with very limited staff. Stores operate as “showrooms” with clothes in all styles, but limited sizes and colors. Customers try items on for size, then clerks order the product online for them and have it delivered the next day.

Increasingly, consumers are expecting online and offline retail to blend together in a seamless experience, and that’s what this new breed of brick-and-mortar stores is doing.